Orders and Judgments Duration November 23, 2020-December 07, 2020

"Good laws make it easier to do right and harder to do wrong."

William E. Gladstone

ALTERNATIVE DISPUTE RESOLUTION

  • Noy Vallesina Engineering Spa  v. Jindal Drug Limited & Ors
    Supreme Court (SC) says proceedings U/S-34 of Arbitration & Conciliation Act not maintainable against Foreign award-26 November 2020
    Supreme Court (SC) has observed, “…, we are of the considered opinion that the Arbitration Act, 1996 has accepted the territoriality principle which has been adopted in the UNCITRAL Model Law. Section 2(2) makes a declaration that Part I of the Arbitration Act, 1996 shall apply to all Arbitrations which take place within India. We are of the considered opinion that Part I of the Arbitration Act, 1996 would have no application to international commercial Arbitration held outside India. Therefore, such awards would only be subject to the jurisdiction of the Indian courts when the same are sought to be enforced in India in accordance with the provisions contained in Part II of the Arbitration Act, 1996. In our opinion, the provisions contained in the Arbitration Act, 1996 make it crystal clear that there can be no overlapping or intermingling of the provisions contained in Part I with the provision contained in Part II of the Arbitration Act, 1996.”
    The Judgement can be accessed at:
    https://www.livelaw.in/pdf_upload/pdf_upload-385139.pdf
  • Dholi Spintex Pvt Ltd v. Louis Dreyfus Company India Pvt Ltd
    Indian parties free to choose foreign law to govern Arbitration between them-24 November 2020
    The parties entered into an Agreement for import of American Cotton, which provided that in case of a dispute, the same shall be referred to Arbitration under the Rules and Arbitration procedures of the International Cotton Association (ICA). Arbitration under ICA bylaws is conducted under the English Arbitration Act, 1996. The plaintiff argued, such an agreement was invalid, null, and void, and therefore, the Arbitration initiated by the defendant was also null and void and deserved to be permanently injuncted. The Court stated that whether two Indian parties could agree to contract out of substantive Indian law was no more res-integra, and that they could agree to a foreign seated Arbitration. In view of the decision of the Supreme Court in Reliance Industries & Anr vs Union of India, the Court observed that it was trite law that in case of Arbitration having a foreign element, three sets of laws may apply to it i.e. the proper law of the contract, the proper law of the Arbitration  Agreement/lex arbitri, and the proper law of the conduct of arbitration/lex fori/curial law. Relying on a Supreme Court judgment, the Court explained that the principle of party autonomy in Arbitration was the basis that permitted the parties to adopt foreign law as the proper law of Arbitration. In conclusion, the Court said, "Therefore, an Arbitration Agreement between the parties being an Agreement independent of the substantive contract and the parties can choose a different governing law for the Arbitration, two Indian parties can choose a foreign law as the law governing Arbitration. Further there being clearly a foreign element to the Agreement between the parties, the two Indian parties, that is the plaintiff and defendant could have agreed to an international commercial Arbitration governed by the laws of England. Hence Clause 6 of the contract dated 30th May, 2019 between the parties is not null or void."
    The Judgement can be accessed at:
    https://images.assettype.com/barandbench/2020-11/b354de26-3db2-4afa-af14-6a43e9af0fad/JUDGMENT_IN_DHOLI_SPINTEX_PVT.pdf

COMPETITION & UNFAIR TRADE PRACTICE

  • Mr Deepak Sultania v. Security Printing and Minting Corporation of India
    Competition Commission of India (CCI) rejects complaint of unfair practices against SPMCIL, Security Paper Mill– 12 November 2020
    The Competition Commission of India (CCI) has rejected a complaint of alleged anti-competitive practices made against Security Printing and Minting Corporation of India Ltd (SPMCIL) and Security Paper Mill. The complaint pertained alleged abuse of dominant position by the entities with respect to a tender for procuring bearings by way of inserting discriminatory conditions. Disposing of the complaint, the CCI said it was of the opinion that “there exists no prima facie case” of violation of competition norms. For the case, the market for industrial bearings in India was considered as the relevant one. The CCI observed, “The Commission observes that the OPs do not appear to be the only buyers in the market for the relevant product and the market in some sense seems to be fragmented. Moreover, bearings are widely used in many industries including automobile, agriculture, earth moving equipment, energy and power industries, manufacturing plants units and not by the OPs alone,”.
    The Oder can be accessed at:
    https://www.cci.gov.in/sites/default/files/41-of-2020.pdf

CORPORATE

  • State Bank of India v. Athena Energy Ventures Pvt Ltd
    Whether Corporate Insolvency Resolution Process can be initiated against Principal Borrower and Corporate Guarantor simultaneously for same set of debt and default? Tribunal decides-24 November 2020
    The National Company Law Appellate Tribunal (NCLAT) has held that simultaneous initiation of corporate insolvency resolution process (CIRP) against a Principal Borrower and its Corporate Guarantor is permissible under Insolvency & Bankruptcy Code (IBC). The judgement reads, “..simultaneously remedy is central to a contract of guarantee and where Principal Borrower and surety are undergoing CIRP, the Creditor should be able to file claims in CIRP of both of them. The IBC does not prevent this. We are unable to agree with the arguments of Learned Counsel for Respondent that when for same debt claim is made in CIRP against Borrower, in the CIRP against Guarantor the amount must be said to be not due or not payable in law.” The NCLAT added that it agreed with the Appellant’s stand and ILC Report that insolvency applications were maintainable against both Borrower and Guarantor, and only at the stage of disbursement, an adjustment could be made. Relying on Sections 60(2) and (3) of the IBC, NCLAT said that since two applications could be filed for the same amount against Principal Borrower and Guarantor, they were maintainable as well. It further recorded that the insolvency or liquidation or bankruptcy proceedings against the Corporate Guarantor or Personal Guarantor shall have to be transferred to the NCLT dealing with insolvency resolution process or liquidation proceeding of the Corporate Debtor concerned.
    The Judgement can be accessed at:
    https://indiankanoon.org/doc/23261857/   

Disclaimer “This information has been gathered from various sources. Nothing herein is or may be construed as legal advice”.